While there’s no big upswing in the construction economy this year, there is at least forward progress, according to FMI’s 2021 Engineering and Construction Third Quarter Outlook report. Given a contentious election and pandemic, any progress is probably a good thing.
And for transportation construction, the outlook turns especially bright after 2022.
According to the report, total engineering and construction spending for the U.S. is forecast to end 2021 up 2%, compared to up 5% in 2020.
Investment in residential, especially single-family homebuilding and remodeling, is the primary driver in construction spending. Water supply is the only non-residential segment anticipated to grow vigorously this year with a likely gain of 5%.
Multifamily residential, health care, communication, manufacturing, highway and street, and sewage and waste disposal are considered stable and expected to end the year with growth at about the rate of inflation, between 0% and 4%. Mixed public and private segments are expected to end the year with growth roughly in line with inflation and are also considered stable.
In the third quarter of last year, the Nonresidential Construction Index (NRCI) dropped to below 40, the only time that’s happened since the Great Recession of 2008-09. No doubt the drop was a result of the coronavirus pandemic, government confusion on how to handle it, and widespread layoffs and lockdowns.
